Marks & Spencer like-for-like sales dropped 6.1 per cent over the last three months as the effects of rising food prices and a slowing economy hit the retailer.

The 114-year-old high street institution suffered on almost all fronts with food sales down 5.9 per cent, clothing falling 3.5 per cent.

However, sales of home goods rose 2.9 per cent, and online sales were up 34 per cent. International sales gained 24.2 per cent.

M&S chairman Sir Stuart Rose admitted the firm faced a difficult environment.

“Consumer confidence remains fragile and the retail environment unpredictable,” he said.

“Consumers are increasingly cautious about their budgets. We have responded by offering our customers better values and more promotions across the business.”

Sir Stuart added he was confident about the M&S Autumn/Winter range of general merchandising and the firm was “implementing a range of initiatives to improve value, innovation and availability” in the food department.

The firm also announced internal cost cutting with operating cost growth to fall to between four and five per cent – down from previous estimates of seven per cent.

Capital expenditure this year is now expected to be around £700 million, compared to the previous guidance of £800 to £900 million

Over the last year and a half the M&S share price has fallen by over two-thirds.

In morning trading the markets responded well to the announcement – with the M&S share price rising 7.02 per cent to 225.00p at 9:00 BST.